Market may edge higher as mutual funds may provide support

The market may remain firm today as mutual funds are likely to support prices to prop up their year-end net asset values (NAVs). Today is last trading session of the financial year FY 2007 (year ending 31 March 2007).

The key data due today is the weekly inflation date which will be released at about 12:00 IST. Wholesale price inflation is forecast at 6.50 percent for the 12 months to March 17, little changed from an annual rise of 6.46 percent a week earlier. Annual inflation hit a peak of 6.73 percent in early February, its highest rate in more than 2 years.

Stock exchanges have clubbed settlement of trading done today with that of Monday (2 April)’s trading as banks remain closed on Monday for financial year closing.

The market-wide rollover of March futures to April was at 70-72%, as against 78-80% during the previous expiry. Rollover in Nifty March futures to April was at 65%, as against 74% in the previous expiry, according to estimates. A large portion of the rollover to April was short positions due to the existing weak investor sentiment.

Asian markets were mostly in the red on Friday (30 March 2007). Key benchmark indices in Hong Kong, China, Singapore, South Korea and Taiwan were down by between 0.03% to 0.15%. Japan’s Nikkei was up 0.07%.

US blue chips edged higher on Thursday after data showed the economy in the United States grew at a faster clip than previously thought in the final quarter of 2006. The Dow Jones Industrial Average rose 48.39 points, or 0.39 percent, to 12,348.75, rebounding after a three-day losing streak. The broader Standard & Poor's 500 index gained 5.30 points, or 0.37 percent, to 1,422.53. The Nasdaq Composite Index edged up 0.78 point, or 0.03 percent, to 2,417.88.

Oil rose nearly 1 percent, building on a 3 percent surge on Thursday, as a stand-off over the capture of British sailors and marines by Iran escalated and US naval exercises in the Gulf continued to ratchet up tension between Tehran and the West. Iran, the world's No. 4 oil exporter, had suspended an offer to release the only woman among the 15 British personnel it is holding. Their capture last week occurred just before the United Nations imposed new sanctions over Iran's nuclear programme. US oil rose 64 cents to $66.67 a barrel.

FIIs were net buyers to the tune of Rs 520 crore on Wednesday 28 March 2007, the day when Sensex had lost 240 points due to weak global markets. As per provisional data, FIIs were net sellers to the tune of Rs 172 crore on Thursday 29 March, the day when Sensex had risen 95 points tracking Asian recovery.